Public Bill Committee

[Sir Nicholas Winterton in the Chair]

(Except clauses 3, 5, 6, 15, 21, 49, 90 and 117 and new clauses amending section 74 of the Finance Act 2003)

Nicholas Winterton: I welcome all hon. Members to our sitting on this rather dull day. I apologise that the weather has broken, but at least it is a little cooler, so perhaps we will make even faster progress.

Clause 10

Rates of tobacco products duty

Question proposed, That the clause stand part of the Bill.

Justine Greening: I want to make a few comments about the clause. We recognise that it introduces an inflationary increase to maintain the price of cigarettes and hand-rolled tobacco, and we support that. However, will the Minister give us an update for the record on where we are in terms of duty in relation to tax revenue maximisation, and how the proposed increase relates to that?
During the Public Bill Committee debate on last year’s Finance Bill the then Financial Secretary, the hon. Member for Wentworth (John Healey), said that
“any big rise in the rates of tobacco duty will reduce revenue and increase smuggling, so that is a central consideration for us as we weigh up these duty decisions.”——[Official Report, Finance Public Bill Committee, 10 May 2007; c. 73.]
It would be helpful to have the Minister’s statement on whether that is still the Government’s position and whether the aim of this inflationary increase is to continue to be somewhere close to the tax revenue maximisation point. In addition, will the Minister give us a brief update on the Revenue’s understanding of the impact of the smoking ban on consumption and duty?
A key point is that the Government are considering their smuggling strategy, having had one in 2003-04, but it seems that progress on bearing down on smuggling has plateaued, although I recognise that there was some progress. I understand that that is why the Government are considering the matter again. However, the Tobacco Manufacturers’ Association said:
“The increase in tobacco tax announced today will do little to reduce the level of tobacco smuggling and cross border shopping which lost the Treasury £4.5 billion in revenue last year. The decision helps to maintain the UK’s position as one of the world’s most profitable destinations for tobacco smugglers and this is of great concern to the TMA and its member companies.”
We can put those comments in the context of who is making them, but smuggling takes a hell of a lot of money that would have gone to Her Majesty’s Revenue and Customs in duty. The latest estimates show that up to 18 per cent. of cigarettes and 62 per cent. of hand-rolled tobacco consumption is smuggled, and that 70 per cent. of all large-scale cigarette seizures are counterfeit. On top of that, many other smokers choose to buy their tobacco products from elsewhere in the EU where taxes and prices are considerably lower. That is another statistic provided by the Tobacco Manufacturers’ Association.
Smuggling is not an issue only for the Treasury, and I am interested in the Minister’s response because of my broader concerns. Other people who are hit by smuggling are smaller tobacconists and shopkeepers, and those who trade in legitimate cigarettes but are often undercut by those who do not.
I understand that much of the smuggling strategy is focused on border control and some of the more major mainstream franchises or smuggling outfits—the big business involved in smuggling. The end destination of cigarettes and hand-rolled tobacco is often small traders, and I want to find out whether the reworked smuggling strategy will have more focus on tackling smaller traders who are happy to sell smuggled products and often undercut competitors and small shopkeepers who prefer to sell only legitimate cigarettes. Can the Minister give us some clarity on that?
I want to follow up some parliamentary questions that I tabled a few months ago and perhaps to get some clarity from the Minister on the issues raised in them. I tried to find out the level of resourcing for the smuggling strategy and how many customs officers there were in HMRC. I assumed that the answer would be quite straightforward until I got an answer back saying:
“There is no separate group of staff identified as ‘customs officers’.”—[Official Report, 18 December 2007; Vol. 469, c. 1482W.]
To help me table parliamentary questions that will get answers, let me say that I was talking about the men who are generally at ports and airports and who tend to be dressed in uniforms—

Mark Todd: Some of them are women.

Justine Greening: And women. As we go through customs, these people tend to stop us and occasionally go through our luggage to see whether we are smuggling cigarettes. My assumption was that they are called customs officers, but if the Treasury does not agree, I would be keen to know what they are called so that I can table parliamentary questions that will get a proper answer. I look forward to hearing what the Minister has to say.

Jeremy Browne: Good morning, Sir Nicholas. Tomorrow is the 10th anniversary of my giving up smoking, so I do not know whether I need to declare an interest any longer. If I might say something unfashionable, however, I quite enjoyed smoking and I sometimes regret that I gave it up in the first place. However, giving up was no doubt good for my health.
I have two brief points. First, will the Minister confirm that the purpose of tobacco taxation is twofold—to disincentivise people to buy the product and to raise revenue? Will he also confirm that those two objectives are not incompatible? The second point has already been touched on by the hon. Member for Putney. What is the Government’s assessment of the impact of tobacco taxation on the smuggling of illegal tobacco products? What impact does that have in turn on the legitimate retailing of tobacco products?

Angela Eagle: It is a pleasure to respond to the debate. It is a pity that the day is dull, although that was fairly predictable, given that this is the first day of the test match between England and New Zealand. An awful lot of disappointed people, myself included, will be looking at the skies this morning.
Clause 10 increases the duty rates on all tobacco products in line with inflation. Together with VAT, the increase is equivalent to 11p on the price of a typical pack of 20 cigarettes and 4p on a pack of five cigars. Our decision to raise duty rates, which the Committee does not oppose, is in line with inflation in the Budget and will maintain the real price of such products. It will thereby continue to encourage people to smoke less or to give up, as the hon. Member for Taunton did, and I congratulate him on his ability to break the habit.
Duty rates form an important part of the Government’s strategy to reduce smoking prevalence to 21 per cent. by 2010, alongside measures such as NHS stop-smoking services, the ban on smoking in public places, which came into effect on 1 July 2007, and raising the legal age for purchasing tobacco from 16 to 18 in October 2007. Budget 2008 retains the reduced rate of VAT that applies to smoking-cessation products. That point has not been raised, but the measure should be acknowledged. When it was originally introduced, it was time limited, but it will now continue beyond 30 June 2008.
When we set duty rates for tobacco, the potential impact on smuggling, which has been on hon. Members’ minds this morning, is an important consideration. As has been acknowledged this morning, the tackling tobacco smuggling strategy, which was introduced in 2000 and refreshed in 2006, was very successful in reducing the size of the illicit markets for cigarettes over the five years to 2005-06 from 21 per cent. to an estimated midpoint of 13 per cent. Since the start of the strategy, we have seized nearly 17 billion illicit cigarettes and more than 1,000 tonnes of hand-rolling tobacco.
The hon. Member for Putney is right to say that we are looking at hand-rolling tobacco, where there is clearly an issue that needs to be dealt with. However, to answer her question about where we are in respect of revenue maximisation, there is always a balance between excise duties and the smuggling phenomenon, as Committee members know. As my predecessor said in the debate on the 2007 Budget, duty rates are close to revenue maximisation, which is why there has been no greater increase than revalorisation in the Budget. That means that any large real increase in the duty rate would increase smuggling and probably increase the availability of cheap tobacco, which would obviously be a perverse result. That is what HMRC’s model demonstrates.

Mark Field: As I am sure the hon. Lady is aware, the issue in respect of smuggling and counterfeit cigarettes is not simply about revenue maximisation or otherwise from the Treasury’s point of view, but about the safety of those products. Indeed, such products are often considerably less safe. Can she give some detail on how the success rate has been measured? She mentioned that smuggling was roundabout the 21 per cent. level four or five years ago and fell to 13 per cent, following Government initiatives. On what basis is she confident that those figures are accurate?

Angela Eagle: That is the midpoint of a range; that is how HMRC tried to measure something that is difficult to measure. It is clear, from the level of seizures, that the percentages of smuggled goods are down, but it is hard to be deadly accurate about such things, because one does not know how much illicit product is targeted at us. However, we can make estimates from the illicit product that we intercept and by checking what is on sale and what can be picked up in the country. There are ways of doing this.
It is also important to make the distinction between smuggling legally made products—our memorandums of understanding with the tobacco-producing companies have greatly assisted us in dealing with that—and the increasing threat of counterfeit product, which the hon. Gentleman mentioned, which in some cases can have the most interesting things mixed in with it that would do nothing to improve one’s health.
The hon. Member for Putney mentioned her asking further parliamentary questions about Revenue and Customs officers. We do not have Revenue and Customs officers at UK borders whose sole purpose is to tackle tobacco smuggling: they multi-task and do other things as well. Those officers perform numerous roles in protecting the UK from smuggling of all types, be it drugs or other illicit substances, people, money or other things. Such smuggling routes can be used to transfer all sorts of things and it makes sense to have the border authority taking over this aspect of the work to multi-task in that way.
We do not differentiate between HMRC officers at ports and those who are working from elsewhere. However, I am happy to write to the hon. Lady on the overall figures on officers, if she wants me to, rather than pursue the matter through parliamentary questions.

Justine Greening: Obviously, one major change in the smuggling strategy will be that the inland strategy is presumably largely overseen by HMRC, whereas the border authority deals with smuggling after items have entered the UK. Will the Minister tell us how the Government plan to ensure that those two groups work together effectively, given that I believe they will be in different Departments? They will need to liaise closely and share intelligence.

Angela Eagle: We have already put that in place—in fact, in the person of the Minister for Borders and Immigration, who now has a post in the Treasury as well to examine the UK Border Agency. I assure the hon. Lady that a great deal of organisational work is going into ensuring that there is proper liaison between the agency, the Serious Organised Crime Agency and the various other crime squads in question.
The nature of smuggling as a phenomenon means that when one deals with it in a particular place, it morphs into something else. There has been a marked increase in the smuggling of counterfeit cigarettes, as the hon. Member for Cities of London and Westminster pointed out. Some 70 per cent. of large seizures made by HMRC are now counterfeit.
To prevent counterfeit products from penetrating the legitimate retail sector in a bottom-up way, which would greatly increase smugglers’ profit, covert anti-counterfeit markings were introduced for all cigarette packs from October 2007. That will be extended to hand-rolling tobacco products this October, enabling us to tackle the problem from the retail supply end as well as at the borders. I assure the hon. Lady that a great deal of work is being done to ensure that there is co-operation both at the border and inland to detect and seize all such products.
With those reassurances, I hope that the Committee will accept that clause 10 should stand part of the Bill.

Question put and agreed to.

Clause 10 ordered to stand part of the Bill.

Clauses 11 and 12 ordered to stand part of the Bill.

Schedule 5

Fuel duty: biodiesel and bioblend

Jeremy Browne: I beg to move amendment No. 66, in schedule 5, page 139, leave out lines 11 to 35.
Would it be convenient to talk to amendment No. 65 at the same time, Sir Nicholas, or shall I do that separately?

Nicholas Winterton: Separately, please. They have been selected separately, so I ask the hon. Gentleman to address his remarks to amendment No. 66.

Jeremy Browne: I am grateful for your guidance, Sir Nicholas. The amendments are related, but slightly different.
Both amendments are concerned with biofuels, but amendment No. 66 is specifically about off-road rebates. It would remove from the schedule proposed new section 14B of the Hydrocarbon Oil Duties Act 1979, which would allow mainstream use of duty rebates for biofuels that are used off-road.
I have tabled the amendment to explore a few matters, the first of which is what the Government are trying to achieve with the off-road rebate. The explanatory notes on the schedule state that they are trying to
“encourage the wider use of biofuels in off-road applications”.
Can the Minister provide the Committee with a projection of the number of litres of biofuel that will be involved?
As the Committee knows, there are concerns about the sustainability of biofuel production. For example, the rebate mechanism in proposed new section 14B is completely indiscriminate, meaning that sustainable biofuel production will not be differentiated from non-sustainable. If the explanatory notes are accurate, the Government do not appear to be addressing sustainability. It would be interesting for the Committee to learn both how that is factored into the Government’s deliberations and an estimate of the net carbon dioxideemission savings that the Government envisage being achieved as a result.
Will the Minister also clarify whether the measure is a revenue raiser? According to the economic and fiscal strategy report, the new rebate will make money: £5 million in 2009-10 and £10 million in 2010-11. I appreciate that those are not large sums in the grand scheme of things, but it is confusing to me how the Government intend to make money from a rebate.
I should be grateful if the Minister clarified whether the proposal also relates to non-road transport. Committee members will no doubt recall that Richard Branson’s first biodiesel train, the Thames Voyager, was converted to run on 80 per cent. petrodiesel, leading to an estimated 40 per cent. saving on direct emissions. As I understand it, the Government’s proposal requires only that the fuel not be used for a road vehicle. There is no specific mention of other forms of transport, such as planes, trains and sea vessels. I should be grateful if the Minister touched on that issue; that was my purpose in tabling the amendment.

Peter Bone: I rise to speak on the mixed signals that the Government are sending about biofuel, particularly bioethanol. As I understand it, the Government have taken a decision to end the discount for the use of biofuel on roads, yet the measure seems to encourage people to use it off roads. The Government are saying, “Let’s encourage biofuel as long as it isn’t being used on the roads, but on the roads, we’re going to restore the duty to the same level as petrol.”
Huge carbon savings could be made by using biofuel. The Government have not quite made up their mind whether biofuel is a good thing, because of its huge benefit in saving carbon, or whether they are against it, because of its sustainability and impact on food prices. They are sending terribly mixed messages, and we need some clarity about what they are saying. Is biofuel a good thing or a bad thing? Are they giving in to the petrol lobby, or are they as serious as our European colleagues in Sweden, who have made a big effort to get vehicles to switch to biofuel?

Justine Greening: I rise to reiterate the points that have been made. There seem to be a couple of inconsistencies. One is the introduction of the off-road rebate at the same time that the Government are signalling the removal of the road rebate, although that will not take place for a couple of years. The Renewable Energy Association has expressed concern about the unintended consequences: good biofuels might stay within the renewable transport fuel obligation, which applies to on-road use, but bad biofuels—those made in a less sustainable way—might be used off-road. I do not think that that will achieve the Minister’s aims.
I shall take this opportunity to ask the Government more broadly what their strategy is with regard to biofuel. Although it is not covered in this Finance Bill, the Government have signalled in the Red Book that they plan to remove the fuel rebate in 2010. That will have no small financial impact: it will prevent the Treasury from losing £550 million in 2010-11, which means that the renewable transport fuel obligation will become the Government’s key fiscal lever for increasing the amount of biofuels blended into the petrol used on roads.
We had a similar debate when the statutory instrument on the renewable transport fuel obligation went through Committee. The Conservatives are concerned that the RTFO does not include fully outlined sustainability criteria at the moment. In fact, my understanding is that the criteria will not be put in place until 2010-11. Will the Minister explain, therefore, why the Government are stepping away from the introduction of two levers with which to encourage biofuels, instead relying on just one, which many people do not think will be strong enough, soon enough? I am sure that we will come on to the issues about the buy-out price in the next amendment, so I shall conclude my remarks for the time being.

Mark Field: I, too, hope that we can alleviate the need for a stand part debate, and join my hon. Friends the Members for Putney and for Wellingborough in asking the Minister to go into some detail about the Government’s broader strategy on biofuels. I appreciate that, from her perspective, the issue has received a considerably higher profile in recent months, given the problems with the sustainability of food growth, particularly in the developing world.
Some Opposition Members have always been very sceptical about the idea of biofuels being the grand answer to the entire problem, and I would be interested to have some sense of the Government’s thinking. In fairness, I do not expect them necessarily to have a full plan in place; the situation is very fluid, given the huge increase in the price of staple food commodities across the developing world. I appreciate that utilising biofuels for the purposes of carbon-free fuel is likely to become considerably less desirable, at least in the short term, but it would interesting to have some sense of where the Government see this going in the decades to come.

Patrick Hall: The hon. Gentleman’s criticism of biofuels is fair enough, as long as he is talking about the first generation, which is very land-hungry. Does he not acknowledge, however, the strong evidence that second generation biofuels would not fall into the same category and that they could have a useful future, so they should be encouraged?

Mark Field: I fear that the hon. Gentleman knows considerably more about that than I do, and I shall expose my ignorance if I go too far down this path. As he rightly pointed out, however, the first generation of biofuels are very land dependent and have had some perverse effects that were not foreseen at the outset—they were regarded as the great new idea that would solve many of the problems resulting from the desire and need for oil and fuel while fulfilling the equally strong desire to keep carbon emissions to an absolute minimum. I hope that the Minister will give us some idea of the Government’s thinking. Few Opposition Members expect grand answers; we appreciate that it is quite a fluid and volatile situation, and will remain so in the future, but it would be useful to have at least some sense of the pathway that the Government have in mind.

Angela Eagle: I am pleased to say that the hon. Member for Cities of London and Westminster and my hon. Friend the Member for Bedford are both right. If their goals could be achieved, second generation biofuels would certainly be far more sustainable than the first generation. They are not so land hungry and do not have the disadvantages of carbon emissions resulting from the production of the original fuel, whether corn, palm oil, wheat or whatever else people decide to make fuel out of.
The hon. Member for Cities of London and Westminster is spot on in saying that the situation with biofuels is very fluid—forgive the pun. We are trying to develop policies to incorporate the use of biofuels, which will cut carbon emissions if they are the right biofuels produced in the right way. The most obvious example is the fact that clearing a rainforest to produce corn to make biofuels does not necessarily assist the fight against climate change or reduce the planet’s carbon emissions. My understanding is that sugar beet is a far more viable biofuel and is probably already produced sustainably.

Justine Greening: I thought this would be an appropriate time to bring in the subject of “splash and dash”, of which I am sure the Minister is fully aware. The term relates to shipping the core bio components that go into biofuel over to the United States and adding them in. The biofuel is then shipped back to the UK. That is done, because production subsidies mean that production in the States is so much cheaper. What is the Government’s position on that?

Angela Eagle: We are dealing with much of that issue via the European Union and the World Trade Organisation. Of course, I have also been in touch with the biofuel industry in this country. We are well aware of the issues. Unfortunately, the WTO is sometimes frustratingly slow, but I assure the hon. Lady that the Government are well apprised of the issues, as is the EU Commission. She should not worry about the matter.
Schedule 5 is attached to, and introduced by, clause 12. Schedule 5 establishes a new rebated rate for biodiesel and bioblend that is used other than as a road fuel. It allows the commissioners of Her Majesty’s Revenue and Customs to determine the composition of a substance for certain prescribed purposes. If accepted, the amendment tabled by the hon. Member for Taunton would prevent the introduction of a rebate on bioblend used other than as a fuel for road vehicles. It would not alter any of the other provisions in the Bill that relate to rebated bioblends. As such, I hope that it is a probing amendment.
In Budget 2007, the Government announced that they would encourage the use of biofuels in off-road applications, such as the railways—the hon. Gentleman finally mentioned that when he talked about Virgin trains—by permanently reducing the duty rate for those mixtures. That announcement followed the successful completion of a pilot trial undertaken by a rail company which, hon. Members can probably guess, was Virgin. The rail pilot scheme was successful, but it is not expected that there will be scope for the use of biofuel in aeroplanes. There has been a well-publicised one-off short-term experiment with the same company, but we do not expect it to be used at this time.

Peter Bone: I thought Richard Branson said that all his future profits would go into the development of biofuels for bioplanes to help to massively reduce the carbon footprints of aircraft. That is completely at odds with what the Minister has just said.

Angela Eagle: One of the things for which I am extremely grateful is the fact that I am not responsible for Sir Richard Branson’s pronouncements. I do not believe that I have to explain them to the Committee, so the hon. Gentleman will have to ask Sir Richard Branson what he meant.

Justine Greening: The Minister said that she does not believe that aviation will go down the biofuel route. I understand that, but I wondered whether there was a particular reason why she had reached that conclusion, and if she could share it with the Committee. Is it based on an assessment of which models of current fleet can be adapted, or is it to do with economics? Can she outline her reasons in more detail?

Angela Eagle: The comment that I made is about the short term. It may well be that in the medium to long term, the redesign of aviation engines can become as innovative as the redesign of car engines. Certainly, for the purposes of this rebate in the short term, we are expecting it to be of much greater use on trains than on other forms of transport. Marine transport is another issue. We have an aging world fleet as far as marine goes, and to be able to adapt to the use of biofuels, the mechanics of ships would need to be re-engineered. I hope in the fullness of time that that will begin to happen with other forms of transport, as it has done with cars—we all look forward to that—but it will not happen in the short term without re-engineering. We do not expect that the positive introduction of clause 12 and schedule 5 will drive that, although we hope to ensure that the carbon footprint of many trains can be reduced. Successful pilot projects running biofuel mixes have already taken place, and have demonstrated that with the existing engines it is possible for trains to reduce their carbon footprint considerably. In essence, that is what schedule 5 seeks to do.
The Government believe that biofuel policy should support only sustainable biofuels, which is why the Secretary of State for Transport announced that Professor Ed Gallagher would lead a study on the wider environmental and economic impacts of biofuels, including their impact on food prices. The review will publish its report in June. Members who have read the King report will remember that Professor King spent a great deal of time on the way in which we define the life-cycle costs of fuels, in particular biofuels. Understandably, that is an emerging focus, and we have yet to develop the right methodologies to ensure that we can assess whether biofuels are sustainable. Clearly, that work has to go on in parallel with the development of potential biofuels, particularly second-generation ones.
We can be absolutely certain that if we do a great deal of re-engineering of engines and infrastructure to accept biofuel mixes we will be doing good rather than bad, and that work is proceeding. Previously, a mixture of biodiesel and rebated heavy oil was liable to duty at the punitive heavy oil rate. As announced last year, we are amending the duty regime so that such mixtures become subject to duty at 9.69p per litre. That is the same as the rate for red diesel, which is the fuel commonly used in off-road applications. That is the point of the schedule. I hope that, given those explanations, the hon. Member for Taunton will withdraw the amendment.

Jeremy Browne: This probing amendment was intended to give the Committee an opportunity to discuss the issue along those lines. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Jeremy Browne: I beg to move amendment No. 65, in schedule 5, page 143, line 45, at end insert—
‘27 In Article 21 of the Renewable Transport Fuel Obligations Order 2007 (S.I. 2007/3072), after paragraph (11) insert—
“(12) The Administrator shall undertake an annual review of the effectiveness of the buy-out price level under sub-paragraph (7), including in particular its impact on the level of incentive provided to suppliers to invest in biofuels.
(13) Within two months of completing any review under paragraph (12), the Administrator shall submit a report of its findings to the Secretary of State.
(14) As soon as reasonably practicable after the Secretary of State has received a report on a review under paragraph (12) the Secretary of State shall lay a copy of the report before the House of Commons.”’.
The amendment deals with an issue related to that raised by amendment No. 66. It, too, refers to schedule 5, but it deals with the on-road use of biofuels. Because the wording of the amendment is fairly complicated, it may be helpful to take the Committee through its intention. Article 21 of the Renewable Transport Fuel Obligations Order 2007 allows fuel suppliers to pay a buy-out price to discharge their obligation to replace a certain percentage of their annual fossil fuel sales with biofuel. The so-called renewable transport fuel obligation, which has been in force since April, will be run by the newly formed Renewable Fuels Agency. At present, biofuels receive two forms of support: a 20p per litre rebate and a 15p per litre buy-out price. If a supplier has a litre of biofuel, he will get 20p off the duty rate, and avoid paying a another 15p for not hitting the biofuel target. That creates a total saving of 35p for the supplier.
The Government, however, announced in the Budget that from 2010-11, the rebate would be scrapped and replaced with a buy-out price of 30p a litre. Consequently, my amendment would insert three new paragraphs into the order. Proposed new paragraph (12) would require the administrator of the buy-out mechanism to undertake an annual review of the buy-out level, and its effect on incentivising biofuel investment. New paragraphs (13) and (14) would require the review to be presented to and approved by the House.
This is a probing amendment. Its purpose is to ascertain the Government’s motivation in respect of biofuels. How were the figures arrived at, and how will they be kept under review? Has the Treasury taken account of present and future rises in oil prices and agricultural commodities? Is 30p enough to incentivise a sustainable UK biofuel production industry? That area was touched on in the previous debate. How viable is biofuel production in terms of our total energy requirements? How sustainable is biofuel production, and how is its environmental value measured? Given the EU’s renewable energy directive, which means that 10 per cent. of transport-related energy must be renewable by 2020, I want to establish whether or not biofuel production is likely to make a significant contribution to that target.
Finally, scrapping the 20p per litre rebate and replacing it with a higher buy-out price is estimated, as I understand it, to net the Treasury a saving of £500 million a year. I suspect that this particular schedule and these amendments do not feature prominently on a list of the highlights of the Finance Bill Committee for most Members. However, by my estimate, the proposals in this schedule are the third-highest revenue raiser from the Budget after the changes to vehicle excuse duty and the revenue raised from increased alcohol duties. It is therefore worth the Committee examining these proposals in detail, first to see whether they will achieve the environmental objectives to which the Government aspire and claim that they will achieve, but also because, as I understand it, they are a significant method for raising additional revenue for the Treasury.

Peter Bone: I should declare an interest at the start, as I drive a biofuel car. The Minister said earlier that it will take some time to get engines to adjust to the new biofuel, but the technology is here already; it is a very simple mechanism and a car can run on biofuel or petrol.

Angela Eagle: The context of those earlier remarks was marine and aviation fuel, not car fuel. I absolutely accept that the technology is available for cars.

Peter Bone: I am grateful to the Minister for making that point clear.
There is something that has not emerged in the discussion so far. We have been talking about the rebate and the fact that the rebate for biofuels will be raised in due course to a level such that petrol duty and biofuel duty will be the same. At the moment, a litre of biofuel is roughly 2p cheaper than a litre of unleaded petrol. Unfortunately, it is 50 per cent. more inefficient, so when someone drives a biofuel car, they are paying substantially more to drive it than to drive a petrol car. 
At the same time, the Government are providing grants for forecourts to convert to biofuel stations. There are only 17 or 19 biofuel stations in the country, so we are talking about first-generation technology. We have already heard the remarks by the hon. Member for Bedford and he is absolutely right that second-generation biofuels will be much better. It is rather like video recorders; if the first video recorders were what we were going to end up with, we would never have had a video recorder at all.
In my opinion, the Government have got to make up their mind whether or not they want to go down the biofuel route. The amendment clearly raises that issue again. I do not want a detailed explanation; I just want to know whether or not the Government want to encourage biofuel.

Justine Greening: I rise to echo some comments I made in my first contribution, and also to echo some of what has been said by other hon. Members. We need to be very careful about what we are doing with the buy-out price. There is no doubt that the interaction between the buy-out price and the fuel rebate is absolutely critical to unlocking this market to its full potential.
As things stand, in 2008-09 we will have a 20p per litre rebate on biofuel, combined with a 15p per litre buy-out price if we do not meet the renewable transport fuel objectives. Effectively that means that if it costs companies less than 35p to produce a litre of biofuel, it will be economical to supply the biofuel, but if it costs more, it is cheaper for them to buy out of the obligation. When we reach 2010, however, the buy-out price will increase to 30p per litre, but the biofuels duty rebate will end. That means that companies need to produce biofuel for 30p per litre or less for it to be more profitable than buying out. Furthermore, without the rebate, all the cost will fall on the consumer. There is a real danger that if companies buy out of their obligation on biofuels, customers will pay for the policy, but we will not actually see the carbon savings. That would be a real double whammy, not only for the consumer, but for the environment.
How, therefore, does the Treasury go about setting the buy-out price? How does it arrive at a price of 30p per litre? To echo the comments of my hon. Friend the Member for Wellingborough, how does the Minister see this market developing? Are the Government doing enough to ensure that we unlock the demand, which I am sure is there, for biofuels and biofuel cars? At the moment, we are not really doing that.

Angela Eagle: It is good to have such simple questions to deal with on a Thursday morning. Part of the issue in the re-engineering of economies to reduce our carbon footprint is that there is no utter certainty about the most sensible and carbon-efficient way through the process—as the hon. Member for Cities of London and Westminster said, this is a fluid situation. We are attempting to put in place analytical approaches to allow us to establish what a good or a bad biofuel is, and Professor Gallagher will do some of the work on that and on the effects on fuel prices.
The hon. Member for Wellingborough was right to say—as Professor King did in her extremely good report—that biofuels are less efficient in terms of the power that they give to the car, so it would need more litres to do the same number of miles. That is yet another complication that we must take into account when we analyse whether to incorporate biofuels into our fuel and what the effect will be. Clearly, the way in which the biofuel originated also has an impact on whether it is a positive or negative thing.
There are therefore many different variables—all potentially moving in different directions, but the analytical structure is only just coming into place. That is the background against which all advanced economies have to see what they can do to incorporate biofuels in the most environmentally sustainable way, without that leading to perverse results such as increased carbon emissions, and without putting food prices up to such an extent that there are food riots in different parts of the world.
If biofuels are produced—I used an extreme example earlier—by knocking a rain forest down, they will definitely not reduce our carbon footprint. Other sources of biofuels are almost certainly sustainable, and I mentioned sugar beet. People in academia are doing the work so that we can identify where different biofuels come in that regard, and we must try to develop policies in the light of developing knowledge and analytical capabilities. The road transport fuel obligation is a better way of taking account of different biofuels than a simple duty, which does not allow us to distinguish between different biofuels and the way in which they are produced.

Justine Greening: I fully understand what the Minister is saying, but the critical issue is the relationship between the buy-out price and the cost to manufacturers of producing a litre of biofuel. The Treasury must surely be talking with the industry, and it must have made some assessment of how much it costs a manufacturer to supply a litre of biofuel. That is the key question. If the buy-out price is set above the cost of production, it will create one incentive, but if it is set below it, it will create an entirely different incentive. The modelling has as much to do with the future costs to manufacturers of supplying biofuels as with anything else. What is the Treasury doing to understand what those costs will be?

Angela Eagle: We do a great deal of work to understand what they will be, and to make the road transport fuel obligation buy-out price bite at the appropriate place, but again, prices move up and down all the time. The costs of alternatives to biofuel, as we can see from the price of oil, move up and down—mainly up, if we are talking about oil. The Treasury is keeping the price of the buy-out under review as evidence emerges of the environmental and economic impacts of biofuels. We will consider it with respect to the Gallagher report and make decisions on whether the buy-out price is too low or too high as we go on.
There are no easy answers to those questions. I can only reassure the hon. Lady that the buy-out price is meant to provide an appropriate incentive. The Treasury is not particularly interested in having a completely ineffective system. Nor, I suspect, is the Department for Transport, which is responsible for the road transport fuel obligation, so work is under way to set an effective buy-out price. If evidence emerges that it has been set wrongly, I am sure that the Renewable Fuels Agency will have some words to say about it. The Government will certainly be open to emerging evidence of that kind. I am not sure what else I can say, but I will give way to the hon. Lady if she wants to ask another question.

Justine Greening: I appreciate the Minister’s response. As this is an opportunity to discuss the issue in the context of the Finance Bill, I have a further question. It looks as if the tipping point will be reduced in two years’ time from 35p, which includes the rebate and the buy-out price, to 30p when the rebate is gone and the buy-out price has risen. That suggests that the Treasury suspects that the cost of producing biofuel will gradually decrease over time, and that the buy-out price therefore will not need to be as high, but that is set against a backdrop of rising food prices. There might be a different world view about the price inflation of many foodstuffs used to produce biofuels than when the Treasury first worked out the buy-out price. I wanted to put that on record. Does the Minister accept that it suggests that the proposed 30p buy-out price for 2010-11 will need to be carefully considered?

Angela Eagle: I have said that we are keeping it under constant review as all those changes happen. The road transport fuel obligation provides much more scope for reflecting sustainability than a duty differential between different biofuels, and without the risk of fraud. That has an impact on the sustainability argument, which is why we want to shift the weight of delivering the policy to the road transport fuel obligation rather than having the duty differential.
The RTFO’s effectiveness will be monitored, as the hon. Member for Taunton rightly said, by the Renewable Fuels Agency, which administers the scheme. The agency will be responsible for providing regular reports to Ministers and Parliament on its implementation. Under the Renewable Transport Fuel Obligations Order 2007, the Renewable Fuels Agency is duty-bound to publish an annual report including details of the extent to which the obligation has been met by buy-out payments. The Government will take the reports into account when deciding on matters such as the future level of the buy-out price. Any change to the buy-out price will require a new road transport fuel obligation order, which will be subject to consultation and debates in both Houses of Parliament.
The hon. Gentleman is trying to put into the Finance Bill something that already exists in the order that set up the road transport fuel obligation. The arrangements will come back before Parliament in a report, not from Her Majesty’s Treasury, but by the agency. I would ask him not to press the amendment to a Division, because the arrangements that it would put in place already exist, albeit not in a Bill.

Jeremy Browne: That was a useful discussion and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 5 agreed to.

Clause 13

Rates and rebates: increase from 1 October 2008

Question proposed, That the clause stand part of the Bill.

Nicholas Winterton: With this it will be convenient to discuss new clause 4—Fuel duty regulator—
‘In the HODA 1979 (c. 5) in section 6 (excise duty on hydrocarbon oil) there is inserted after subsection (1A)—
“(1AA) In every Budget Statement and pre-Budget Report the Chancellor of the Exchequer shall provide his forecast for the price of oil and set out anticipated yield from fuel duty and VAT on fuel for that price and for a range of prices up to 50 per cent. above his forecast.
(1AB) In the 2008 pre-Budget Report the Chancellor of the Exchequer shall bring forward a mechanism for—
(a) using additional revenue from VAT on fuel above forecast to offset fuel duty when the oil price rises above his forecast level;
(b) providing specific fuel duty reductions targeted at fuel sold in sparsely populated areas; and
(c) providing specific fuel duty reductions targeted at fuel sold to road haulage operators;
and the Chancellor of the Exchequer shall by order define “sparsely populated areas” and “road haulage operators” for the purposes of this subsection.
(1AC) Whenever international oil prices return to the level estimated by the forecast made in accordance with subsection (1AA), the offset described in subsection (1AB) (a) to (c) is suspended until the price rises again or the forecast price is amended by the next Budget or pre-Budget Report.”.’.

Stewart Hosie: Before I speak on new clause 4, it is worth noting the context within which the debate is taking place. When I proposed a similar measure on 6 July 2005, I said that, according to the AA, the price of unleaded petrol had risen to 86p a litre, up 6p in the previous six months. Fuel is now priced at anything from £1.10 to in excess of £1.30 a litre.
I said then that Brent crude had touched $60 a barrel, up from an average price across the piece of $50. In the run-up to the recent Budget, the price was an average of $83.60 a barrel, an increase from the $68 forecast in the pre-Budget report. In the quarter before this year’s Budget, the price of a barrel averaged $94. In four of the five working days up to the Budget, we saw record closing prices for North sea oil, and the Red Book forecast £56 billion of revenue in the next six years, which was up from the previous six-year forecast of £38 billion. Oil has gone from $60 a barrel in 2005 to an annual average, up to the Budget, of $83.60 via a last-quarter score of $94 a barrel. I checked the spot price a couple of days ago: it was $123.97—nearly $124 a barrel. It is in the context of massively rising oil prices and high price spikes for fuel at the pumps that I am proposing the new clause.
The impact on people is also worth noting. When we debated that similar proposal in 2006, the AA estimated that the monthly increase in the cost of fuel for a two-car household had risen by £13.18—a 6p rise on the litre. By April this year, the corresponding rise for a two-car household was £32.97 a month—nearly £33. The measure has been proposed in the knowledge that the Treasury, not content with the normal indexed rises, has proposed in the Budget an additional, above-indexation escalator from 2010.
The new clause would do three things: it would oblige the Chancellor to publish a forecast yield figure at every Budget and pre-Budget for fuel duty and associated VAT for a range of prices up to 50 per cent. above his anticipated yield, and to develop a mechanism by which to use the windfall on VAT gain to offset the duty; and allow the regulator to be removed when the price drops back to the baseline, or when the new yield forecast is made in subsequent Budget and pre-Budget statements. The latter proposal is important because I have been criticised in previous debates that the proposal was for a one-way escalator and that it would not afford the opportunity to return. The proposal makes it clear that the new yield forecast can be set to take in qualitative rises in prices and not simply spikes.
The proposal is partly probing, but it may come back in another form at a later stage in the proceedings. I want to hear what the Government and the Opposition think of the three elements of proposed new subsection (1AB) to the Hydrocarbon Oils Duties Act 1979; namely, that an offset might be introduced universally, that one might be introduced to assist remote rural areas and, in particular, that one might be directed towards the haulage industry, which is of massive concern to me. That is probably why the Road Haulage Association is backing the new clause and calling on MPs from all parties to set aside political considerations and support that or a similar measure.
We will all have had representations from our constituents and from hauliers. We know, certainly in Scotland, that the cost of all goods is driven up as the cost of haulage increases. I know from my part of the country that the competitiveness of Scottish business has been reduced because of increased transportation costs. Even well known companies, such as Ramage, are going into administration, citing, among other things, the cost of fuel as a key factor. When a company such as that, which in parts of the country was as well known as Eddie Stobart—people would look out for those wagons—goes into administration citing fuel costs as a factor in that decision, something is seriously wrong.
I do not want to take up too much more time, but it is important that the Government understand that this is not all someone else’s problem. Of the average £37,000 that it costs each year to provide fuel for a 44-tonne truck, the Government already take £25,000—of course, they take more when the price at the pump rises. Therefore, the Government cannot abdicate responsibility for some of the problems. They will be happy to force a typical 20-vehicle company to generate £30,000 a year more to pay for a 2p rise in duty. They are happy to take the VAT windfall when the price at the pump rises and they are happy to take the £56 billion that it has been forecast will come from higher oil prices over the next six years.
Fundamentally, the new clause says that it is time for the Government to put something back when prices not only bite a little but tip companies over the edge, put too much pressure on remote rural areas and force ordinary families to find hundreds of pounds extra a year simply to do the basics. I cannot put it any better than Geoff Dossetter, the Freight Transport Association’s director of external affairs. He was quoted in the Sunday Herald on 13 April as saying:
“It’s barking mad. We’ve already got the highest diesel taxes in Europe.”
With that, I will conclude. I want to hear not only what the Government have to say but what the other parties have to say, particularly on the possibility of the fuel tax regulator concept being introduced to offer at least some assistance to the road haulage industry.

Nick Palmer: I have a couple of questions. First, although the hon. Member for Dundee, East has allowed for the possibility of fuel prices falling back to a level originally envisaged, he will be aware that current fuel prices are driven partly by the limited supplies of fossil fuels in the world but also by considerable political instability in countries such as Venezuela, Iraq, Iran and, potentially, Russia, and it is at least possible, and some serious analysts are suggesting, that there will be a substantial fall in fuel prices at some point. We may think that unlikely, but the new clause does not allow for any reaction at that point. It is still a ratchet: if prices go up, the Government are forced in effect to reduce the duty, but if prices go down, the beneficiaries simply pocket the proceeds.
To that extent, the measure seems slightly populist, because if there is a sustained rise in fuel prices, the terms of trade will have moved against Britain and there will be a collective problem for us all. If we attempt to protect only the people immediately affected—for instance, the road haulage industry—we are redistributing the impact of the oil price rise on to everyone else. In particular, I do not think that the hon. Gentleman’s proposal to protect rural areas will work. If garages in certain postcodes were subject to lower duty, there would be substantial fuel smuggling, as we see across the border between Northern Ireland and the Republic of Ireland. It is not possible, within one country or in a remotely open economy, to have selective duty in different areas.
Finally, let us consider the environmental impact of fuel duty. Many of my constituents, like those of the hon. Member for Dundee, East, are worried about the impact of rising fuel prices, but if our reaction to a real world problem with the supply of fossil fuels is always effectively to subsidise prices, in the long run we are avoiding dealing with climate change and the decline in fossil fuels. There is a tendency for all parties to talk the talk on these issues without walking the walk. We need to consider the impact of the crucial decision that is to be made on how world affairs affect the environment in Britain and accept that, sometimes, a change in behaviour is needed on the part of our consumers and our Government.

Stewart Hosie: I shall answer some of those points at the end. However, on the latter point, I have no problem at all with managed price rises to tackle climate change. I have said that before. It is not the managed increases to tackle a particular problem that are of concern, but price spiking, which is so serious and damaging, must be addressed, as must the excessive increases that happen quickly.

Nick Palmer: I accept the hon. Gentleman’s point. However, if he refined his new clause to take account of circumstances in the unlikely event of a price dip, we would have a serious, rounded proposal to consider.
The new clause skirts around how we are going to tackle dwindling fossil fuels; it says, basically, that if there is a problem with rising world prices the Exchequer will help. In the long run, that will not be sufficient. Perhaps the Conservative spokesperson will confirm that the Conservatives are considering reintroducing the fuel price escalator. If that is done, the issue will arise even more acutely. I do not necessarily disagree with that, but it is controversial and needs serious discussion.

Justine Greening: I am conscious of what has already been said, so I will keep my comments brief. Obviously, we support the belated decision by the Chancellor to delay the 2p rise in fuel duty. We understand, from interested stakeholders, including the AA, that rising petrol and diesel prices have increased the total cost of running a small family car from 55p a mile to 58p a mile. As the hon. Member for Dundee, East said, that has an impact not just on families, but on people who use petrol to carry out their day-to-day business, including road hauliers.
We welcome the Chancellor’s drawing back from including his 2p duty rise in the Budget in April and his proposal to delay it until October. However, it was delayed not because of anything to do with road hauliers or families who cannot afford to pay more fuel duty, but mainly for self-interested political reasons.
Nevertheless, we welcome the deferral in itself and that is why we will support the clause. I understand that the hon. Gentleman has introduced a new clause to look at how we can perhaps have a more sensitive rate of tax on fuel, one that takes into account the ups and downs of oil prices, and that is something that we should consider.

Angela Eagle: Is the hon. Lady saying that it is the Opposition’s policy to introduce a fuel duty regulator?

Justine Greening: I think that I had only said about 15 words before the Minister jumped up to intervene on me.
We are not saying that, actually. The point raised by the hon. Member for Dundee, East was that there is clearly an issue that the Government themselves have recognised, which is why they have had to delay the fuel duty rise. Fuel, by necessity, fluctuates in price in line with the oil price. That can mean that, at the same time as fuel prices are rising and fuel duty is rising, VAT on fuel is also rising. Therefore, there is clearly a double impact of the Treasury when fuel and oil prices go up.
I am just recognising that the hon. Member for Dundee, East pointed out the impact of all these price rises and he was making a suggestion to deal with them. I must say that it is not one that I agree with. None the less, he was making a suggestion that we should look carefully to see if there are ways to handle this situation more effectively than the way we have at the moment, whereby the Government have proposed a 2p rise in fuel duty and then, at the last moment, they have had to say that they want to delay its introduction. I do not think that that is good for families, but it is certainly not good for businesses.

Nick Palmer: Will the hon. Lady rule out the possibility of reintroducing a fuel price escalator?

Justine Greening: At the moment, we think that all these issues need to be kept under review. The difficulty is that we have dramatically escalating oil prices; as has been said, just six months ago they were at a much lower level. In fact, the range of estimates that experts have for what the price of a barrel of oil may be in the next six months is, I understand, between £80 and £150, even up to £160.

Clive Efford: In talking about the fuel duty escalator and rising petrol prices, the principle that the hon. Lady is discussing is that the increase in price is desirable because it alters behaviour and reduces the use of fossil fuels, and therefore it has a positive impact on the environment. That is the green taxes that her party has talked about.
Now we are getting to the nitty-gritty of the debate, because this is where we have to take decisions about whether to support policies that will change behaviour. Is it the basic approach of the Conservatives that the cost of petrol has to go up to change behaviour, whether that rise is as a result of the market or the use of the fuel duty escalator? Is that the Conservative position?

Justine Greening: The hon. Gentleman is asking a question that is not really appropriate, in the sense that he is asking if the cost of petrol has to go up to change behaviour. Well, we have just had a debate on biofuels, which is totally unrelated to the cost of petrol but is related to changing behaviour.
I must say that, if the hon. Gentleman and his party want to have a good debate about environmental taxes, one that the public can participate in, perhaps they can follow the polls that we have had recently and call an election, to give people the chance to elect their Prime Minister and have a choice on that matter.

Clive Efford: Does the hon. Lady think that she will have a policy by the time of an election?

Justine Greening: At the moment, the hon. Gentleman is talking about our policies, but I have noticed quite a lot of our policies sneaking into this Government’s agenda in recent months, so it is no wonder that he is so concerned to try to get even more policies out of us.

Clive Efford: I am in danger of testing your tolerance, Sir Nicholas, by pursuing this debate.
The reason for the similarities in policy at this time is that the Government are dominating the debate. [Interruption.] Impersonation is the best form of flattery, believe me. Attempts by the Conservative party to come up with green policies have been exposed as a sham because they are not prepared to take a principled position on what is needed to challenge people’s behaviour. They talk about a basket of green taxes that will change people’s behaviour, but when it comes to it, they do not have a principled position.

Nicholas Winterton: Order. Justine Greening has the floor.

Justine Greening: Thank you, Sir Nicholas. I was thinking of intervening on the hon. Gentleman at one point, but I shall move on. [ Interruption. ] Well, we are discussing a clause that introduces a complete change of Government policy, so I do not think that Opposition Members need to take any lectures about who is dominating the debate. In fact, the clause backtracks on the rise in fuel duty. What I am saying—and the Government should welcome this—is that my party supports the decision to delay the fuel duty rise until October.

Jeremy Browne: May I make a contribution, Sir Nicholas?

Nicholas Winterton: I was going to suggest that the Minister reply, but the hon. Gentleman is persistent.

Jeremy Browne: I shall not speak at great length, but as the Conservative and Labour parties have agreed that their policies have morphed into one, it seems reasonable that the Committee should hear an alternative view. In fact, if anyone is seeking an explanation as to why Labour has the worst poll ratings in living memory, it may be because it is adopting too many Conservative policies. That is clearly a way to go down the tubes very quickly. It is not entirely relevant to the matter before us, but only one party gained seats in each of the past three general elections, and I had the good fortune to be a spokesman for that party.

Nicholas Winterton: Order. We are debating a clause in the Finance Bill. We are not on the hustings in Crewe and Nantwich. Please direct your remarks to the clause, Mr. Browne.

Jeremy Browne: Thank you, Sir Nicholas. I am sure that it is a relief to everyone that we have an excuse—being in this Committee—for not being on the hustings for the Crewe by-election.
I am keen to speak specifically on the subject, because the claims made for postponing the 2p per litre duty are exaggerated. If somebody has a 50-litre car, for example, the saving from the postponement would be £1 every time they filled up. The saving to a motorist who drives enough to fill up such a car a couple of times a month would be £12, so we should not make too many extravagant claims about the financial benefits to consumers of delaying the rise.
There is, however, a wider point. When such proposals are postponed, politicians are quick, as the hon. Member for Broxtowe said, to talk the talk, but they are rather less quick to walk the walk. I direct these comments to all parties but particularly to the Conservative party: the party leader having photo opportunities with Zac Goldsmith or other people of that sort is not a substitute for proper policy. My concern is that we cannot have a serious conversation, and certainly not a general election, until the Conservative party makes some serious proposals on road haulage, duty on petrol, and environmental policy, full stop.
 Mr. Bone rose—

Nicholas Winterton: Order. I am afraid that the hon. Member for Taunton is going far too wide. Again, his speech appears to be a political one rather than one on a Government Finance Bill. Opposition policy may be peripheral to discussion of the clause, but we are not debating it. It is the clause in this Government Bill to which we should direct our attention. I believe that Mr. Bone is seeking to intervene.

Peter Bone: The hon. Member for Taunton misses the point. When a Government prepare their Budget, they plan what they expect to receive in VAT on the current or predicted future prices of oil. If those oil prices go up enormously, there is a big windfall gain for the Government. That is what this refers to. It is not part of the plan of environmental taxes; it is a windfall gain and the clause seeks to deal with that. What do the Liberal Democrats believe should happen when the Government get a huge windfall from an increase in oil prices?

Jeremy Browne: That is an entirely fair point. I would only answer in more general terms by saying that one of the main reasons that there is a lack of public confidence—

Mark Todd: Will the hon. Gentleman give way?

Jeremy Browne: Wait a second. I sympathise with you, Sir Nicholas, in trying to do your job and manage our proceedings.
I shall first deal with the intervention by the hon. Member for Wellingborough. One of the main reasons why there is public concern about environmental taxation is that there is a suspicion—justified, in my view—that the primary motivation is raising revenue, rather than trying to benefit the environment. I am keen that environmental taxes should be offset by reductions in taxation elsewhere. That means people will be disincentivised to use their cars, for example, but I hope that as a result they will be incentivised to do other things, including working harder.

Mark Todd: Perhaps the hon. Gentleman might find helpful a little thought on the interaction between VAT and the price of fuel because he has been challenged on that point. Consumers have a finite amount of money to spend. If VAT has been increased sharply through an increase in the price of fuel, logic therefore says that they will spend less on other items in household expenditure that would otherwise attract VAT to the Government. The net effect may well be neutral.

Jeremy Browne: I take the hon. Gentleman’s point. [ Interruption .] Well, he was not making a political point; he was making a consumer point. That would obviously depend on consumer patterns. The point has extra validity, because VAT has gone up so much in my adult lifetime. However, that is another matter, which is not directly related to our conversation.
I will finish by making this observation which is specifically and directly relevant. People are naturally concerned about petrol taxes: people who need their cars for work have a professional concern, and most leisure motorists would rather pay less than more. Very few people come up to politicians and say, “Please can I pay more for a service, please will you raise the taxes?” However, some people come to politicians and express an interest in our offering leadership. [Interruption.]

Nicholas Winterton: Order. One speaker at a time.

Jeremy Browne: As a politician, I offer leadership not just followership in attempts to try to reduce carbon emissions and help the environment. I make that observation in passing, because it is relevant to our deliberations. There will be a short-term benefit for politicians who try to follow public opinion but who are derelict in the leadership that they offer on environmental issues. There ought to be a reward for those who take a responsible attitude, and if we want a planet which is as enjoyable for future generations as it is for us today, we cannot continue backing off every time we see an adverse opinion poll on environmental issues.

Angela Eagle: We have had a fascinating debate. I thank the hon. Member for Dundee, East for introducing this particular part of the Finance Bill. We have just heard the hon. Member for Taunton say that the role of politicians is not to listen to the people whom they represent but to lead them against the opinion polls. The hon. Member for Putney supported the hon. Gentleman’s new clause, but then said she did not support the introduction of a fuel regulator, which is what he was discussing.

Nicholas Winterton: I regret I have to bring the debate to an end at this critical point. All papers will be secure in the Committee Room, which will be locked.

It being twenty-five minutes past Ten o’clock, The Chairmanadjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at One o’clock.